News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
Oil - US Crude
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • Forex Update: As of 12:00, these are your best and worst performers based on the London trading schedule: 🇬🇧GBP: 0.33% 🇯🇵JPY: 0.19% 🇪🇺EUR: 0.13% 🇳🇿NZD: 0.05% 🇨🇦CAD: 0.04% 🇦🇺AUD: -0.05% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/8aD0rHNpKv
  • Weekly Strategy Webinar starting in 15mins on DailyFX!! https://t.co/lxd5fZ5LG7
  • Please join @MBForex at 8:30 EST/12:30 GMT for your weekly scalping webinar. Register here: https://t.co/VGr4ZK3QZ9 https://t.co/FGuM1EAoYH
  • BoE's Vlieghe reiterates view that inflation peak is likely temporary $GBP
  • Goldman Sachs lowers Q3 US GDP forecast to 8.5% from 9.5%
  • Heads Up:🇧🇷 BCB Focus Market Readout due at 11:30 GMT (15min) https://www.dailyfx.com/economic-calendar#2021-07-26
  • BoE's Vlieghe: Appropriate to keep the current monetary stimulus in place for several quarters at least, and probably longer. And when tightening does become appropriate, I suspect not much of it will be needed, given the low level of the neutral rate. #GBP @DailyFX
  • 🇲🇽 Unemployment Rate (JUN) Actual: 4% Previous: 4% https://www.dailyfx.com/economic-calendar#2021-07-26
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 93.78%, while traders in Wall Street are at opposite extremes with 72.64%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/bdeCMl2DyU
  • Heads Up:🇲🇽 Unemployment Rate (JUN) due at 11:00 GMT (15min) Previous: 4% https://www.dailyfx.com/economic-calendar#2021-07-26
Dow Jones Retreats as Sentiment Sours, Will Hang Seng Index Follow?

Dow Jones Retreats as Sentiment Sours, Will Hang Seng Index Follow?

Margaret Yang, CFA, Strategist

DOW JONES, HANG SENG, ASX 200 INDEX OUTLOOK:

  • Dow Jones, S&P 500 and Nasdaq 100 indexes closed -0.75%, -0.86% and -0.60% respectively
  • US government bonds yields continued to fall, suggesting that reflation optimism may be faltering
  • Asia-Pacific markets are positioned to follow a negative lead, with most futures trading in the red

Yields, Delta Variant, Jobless Claims, Asia-Pacific at Open:

Wall Street equities pulled back from their record highs as the emerging Delta variant of the Covid-19 virus casted a shadow over the outlook of global recovery. All Dow Jones sectors ended lower, with financial, materials and consumer discretionary sectors leading the decline. 10-year Treasury yields fell to 1.294% - the lowest level seen since February. This suggests that market’s view on reflation and long-term inflation may be weakening. Rising demand for safety may have also attributed to the rise in Treasury note prices, sending yields lower.

Japan’s government announced on Thursday that it plans a new virus state of emergency stretching through the Olympics, which will kick off on July 23rd. This marks the latest government measures to contain the spread of the highly contagious strain.

Meanwhile, weekly initial jobless claims data fell slightly short of expectations. Some 373k unemployment claims were filed last week, compared to a 350k estimate. The previous week’s figure was revised up to 371k from 364k. A slower-than-expected recovery in the labor market may serve to soothe tapering fears as Fed officials monitor both inflation and employment figures to set monetary policy.

US 10-Year Treasury Yield

Dow Jones Retreats as Sentiment Sours, Will Hang Seng Index Follow?

Asia-Pacific markets look set to end the week on the back foot. Futures in Japan, mainland China, Australia, South Korea, Taiwan, Malaysia, India and Thailand are in the red, whereas those in Hong Kong and Singapore are slightly higher.

Hong Kong’s Hang Seng Index (HSI) tumbled 2.89% on Thursday, putting it on the verge of wiping out the entire year-to-date gains. Sentiment deteriorated after Chinese regulators announced new antitrust rules on Thursday following ordering app stores to remove Didi Chuxing earlier this week. An abrupt tightening in regulatory curbs on the country’s large tech firms hurt investor confidence, leading to a sharp fall in the stocks such as Tencent (-3.7%), Alibaba (-4.1%), Meituan (-6.4%) and JD.COM (-3.6%). Near-term outlook may remain bearish-biased as selling pressure doesn’t appear to have depleted.

Looking back to Thursday’s close, all 9 Dow Jones sectors ended lower, with 86.7% of the index’s constituents closing in the red. Financials (-2.19%), materials (-1.35%) and consumer discretionary (-0.87%) were among the worst performers.

Dow Jones Sector Performance 08-07-2021

Dow Jones Retreats as Sentiment Sours, Will Hang Seng Index Follow?

Source: Bloomberg, DailyFX

Dow Jones Index Technical Analysis

The Dow Jones index has likely formed a “Triple Top” chart pattern after prices failed to breach a key resistance level at 34,920 for another try. A deeper pullback from here risks breaking the “Ascending Channel” that formed since November, and may open the door for further losses toward 33,320 – the 161.8% Fibonacci extension.

Dow Jones Index Daily Chart

Dow Jones Retreats as Sentiment Sours, Will Hang Seng Index Follow?

Hang Seng Index Technical Analysis:

The Hang Seng Index broke the ascending trendline as highlighted on the chart below and thus opened the door for further losses. An immediate support level can be found at 27,150 – the 50% Fibonacci retracement. The overall trend appears to be bearish-biased as the SMA lines are about to form a “Death Cross”. The MACD indicator pierced below the neutral line, suggesting that near-term momentum is tilted to the downside.

Hang Seng Index Daily Chart

Dow Jones Retreats as Sentiment Sours, Will Hang Seng Index Follow?

ASX 200 Index Technical Analysis:

The ASX 200 index pulled back from its all-time highs and entered a technical correction. Prices have likely formed a “Bull Flag” pattern, which hints at further upside potential after a period of consolidation. Immediate support levels can be found at 7,200 – the 127.2% Fibonacci extension. The overall bullish trend remains intact as suggested by the upward-sloped SMA lines.

ASX 200 Index – Daily Chart

Dow Jones Retreats as Sentiment Sours, Will Hang Seng Index Follow?

--- Written by Margaret Yang, Strategist for DailyFX.com

To contact Margaret, use the Comments section below or @margaretyjy on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES